Bray v. Booker

• Decision Date: 16 February 1899
• Court: North Dakota Supreme Court

79 N.W. 293

8 N.D. 347

JOHN P. BRAY v. LEWIS E. BOOKER, et al

Supreme Court of North Dakota

February 16, 1899

Appeal from District Court, Grand Forks County; Fisk, J.

Action by John P. Bray against Lewis E. Booker and Katie E. Booker to established and enforce a vendor's lien for $ 8,000 and interest, pursuant to section 4830, Rev. Codes. The trial court awarded plaintiff a lien for $ 3,000, with interest but held that because plaintiff had taken collateral security for $ 5,000 of the purchase price of the property he lost his lien to that extent. The plaintiff, Alse J. Gronna intervener, and the defendants severally appeal.

Affirmed.

Templeton & Rex (Tracy R. Bangs, of counsel), for plaintiff and appellant.

The bank stock was put up to secure payment of Booker's note to the indorsee, the Merchants' National Bank, and not to Bray. This does not forfeit the right of lien. Wilson v Lyons, 51 Ill. 166; Carey v. Boyle, 11 N.W. 47; Barrett v. Lewis, 5 N.E. 910. When the payee of a note transfers it and remains liable thereon as indorser or guarantor, if he subsequently redeems the note the lien revives. Jones on Liens, §§ 1092-1096; Perkins v. Gibson, 24 Am. Rep. 644; Green v. De Moss, 10 Hump. 371; Kelley v. Payne, 18 Ala. 371; Rogers v. James, 33 Ark. 77; Turner v. Horner, 29 Ark. 440; Bancroft v. Crosby, 74 Cal. 583, 16 P. 504. The lien given by Sec. 4830, Rev. Codes, should be in no way restricted by construction. § 5138, Rev. Codes. The lower court properly established a lien for $ 3,000, that portion of the price unpaid and unsecured. McCauley v. Holz, 62 Ind. 205. Plaintiff did not lose his right to vendor's lien because of accepting the substituted obligation of Booker to pay his obligations to the Grand Forks National Bank, and the Security Trust Company. Turpie v. Lowe, 15 N.E. 834; Elliot v. Plattor, 43 Ohio St. 198; Ry. Co. v. Lewton, 20 Ohio St. 401; DeForest v. Holum, 38 Wis. 516; McDale v. Purdy, 23 Ia. 277; Merrill v. Allen, 38 Mich. 487; Mills v. Bliss, 55 N.Y. 139; 2 Warville on Vendors, 706; Rice v. Sanders, 152 Mass. 108, 24 N.E. 1079; Williams v. Crow, 84 Mo. 298. Bray could maintain an action upon Booker's promise to make these payments, and could enforce the lien as security therefor. Steene v. Aylesford, 18 Conn. 244; Piggot v. Thompson, 3 B. & P. 149 n.; Furnas v. Durgan, 119 Mass. 500; Locke v. Homer, 131 Mass. 93; Farnsworth v. Boardman, 131 Mass. 115; Wicker v. Hoppock, 6 Wall 94; Valentine v. Wheeler, 122 Mass. 566; Muhlig v. Fiske, 131 Mass. 110; Gaffney v. Hicks, 131 Mass. 124; Reed v. Paul, 131 Mass. 129; Coffin v. Adams, 131 Mass. 133; Williams v. Fowle, 132 Mass. 385; Pierce v. Plumb, 74 Ill. 326; Mills v. Allen, 133 U.S. 423; Anoka Lumber Co. v. Fidelity C. Co., 63 Minn. 286, 65 N.W. 353; Churchill v. Hunt, 3 Denio. 321; Stout v. Foulger, 34 Ia. 71, 11 Am. Rep. 138; Kohler v. Metlage, 72 N.Y. 259; Connar v. Reaves, 103 N.Y. 527. The bank and its receiver have by suing Bray repudiated Booker's promise to pay his debt. No action would lie in favor of the bank against Booker for this debt until an acceptance of the agreement, which would amount to a consent by the bank and its receiver that Bray, the original promisee be discharged from his original obligation. Woods v. Moriarity, 9 A. 427; Warren v. Batchelder, 16 N.H. 580; Bohanan v. Pope, 42 Me. 93. Some word or act is essential to show an acceptance or adoption by the creditor of the substituted promise. Dimick v. Register, 9 So. Rep. 79; Wheat v. Rice, 97 N.Y. 296; Dunning v. Leavitt, 85 N.Y. 35; Crowe v. Lewin, 95 N.Y. 423; Turk v. Sidge, 41 N.Y. 206; Moore v. Ryder, 65 N.Y. 438; Crowell v. Currier, 27 N.J.Eq. 152; Trimble v. Strother, 25 O. St. 378; § 3840, Rev. Codes. But the contract was not made expressly for the benefit of the bank or the trust company, and therefore they could not maintain an action thereon against Booker. § 3840, Rev. Codes; Pardee v. Treat, 82 N.Y. 385; Beveridge v. Ry. Co., 112 N.Y. 26. This agreement was made for plaintiff's benefit and it is not sufficient that it might incidentally benefit the third parties named. Parlin v. Hall, 2 N.D. 473; Am. Exc. Nat. Bk. v. Ry. Co., 76 F. 130; Austin v. Seligman, 18 F. 519; Crandell v. Payne, 39 N.E. 601; Constable v. Nat. Steamship Co., 154 U.S. 51; Savings Bank v. Thornton, 44 P. 466; Wright v. Terry, 2 So. Rep. 6; Sayward v. Dexter, Horton & Co., 72 F. 758; Chung Kee v. Davidson, 15 P. 100. The burden is upon defendants to prove waiver, if in doubt the court should sustain the lien. Crampton v. Prince, 3 So. Rep. 519; Manley v. Slason, 21 Vt. 271, 52 Am. Dec. 60; Wilson v. Lyon, 51 Ill. 166; Story Eq. Jr. § 1224; Maroney v. Boyle, 141 N.Y. 462, 36 N.E. 511. No consideration moved from Mrs. Booker to the plaintiff, she was not a bona fide purchaser for value, but a mere volunteer, and plaintiff can enforce his lien against the property. Pylant v. Reeves, 25 Am. Rep.605, 53 Ala. 132; Crampton v. Prince, 3 So. Rep. 519, 3 Am. St. Rep. 718; Davis v. Smith, 7 So. Rep. 159; Davenport v. Murray, 68 Mo. 198; Pratt v. Eaton, 65 Mo. 157; Hunt v. Marsh, 80 Mo. 396; Williams v. Crow, 84 Mo. 298. The fact that Bray deeded to Mrs. Booker, at the request of her husband, with whom the contract was made, does not alter the situation. Jones on Liens, § 1084; Taylor v. Alloway, 3 Litt (Ky.) 216; Davis v. Pearson, 44 Miss. 508; Humphrey v. Thorne, 63 Ind. 296; Baker v. Gilbert, 93 Ind. 70; Burgers v. Fairbanks, 23 P. 292.

John A. Sorley, also Cochrane & Corliss, for respondents and intervener.

Bray discounted the $ 5,400 note to the Merchants' National Bank. He transferred the note absolutely and not by way of pledge, and thereby destroyed his lien to this extent. § 4831, Rev. Codes; Moshier v. Meek, 80 Ill. 79; Elder v. Jones, 85 Ill. 384. A vendor's lien has never been placed upon any substantial basis of principle. 2 Jones on Liens, § 1063; 28 Am. & Eng. Enc. L. 159; Frame v. Sliter, 45 P. 290. A vendor's lien cannot be assigned. 2 Jones on Liens, § 1092. The taking of additional security waives the lien. 2 Jones on Liens § 1086. It is such an insubstantial and shadowy equity that the lien of a subsequent creditor will prevail against it. Bayley v. Greenleaf, 7 Wheat. 46; Meckreth v. Symmons, 1 Lead. Cases in Eq. 373; Bray v. Booker, 6 N.D. 526. The lien is opposed to the general policy of our registration statutes. Pomeroy Eq. § 1250 and n.; 2 Jones on Liens, 1063; Frame v. Sliter, 45 P. 290; Hammond v. Peyton, 27 N.W. 72. It would seem therefore that one who asserts a vendor's lien is not entitled to any special favor from the courts. Kauffelt v. Bower, 7 Serg. & Rawle, 64. Real and personal property were sold together for a lump sum. No price was agreed upon for the real estate, hence it cannot be determined for what sum a lien can be allowed. 2 Jones on Liens, § 1072; Stringfellow v. Joe, 73 Ala. 207; McCandlish v. Keen, 13 Grat. 615; Peters v. Tunell, 43 Minn. 473; Griffin v. Byrd, 19 So. Rep. 717; Wilkinson v. Palmer, 83 Ala. 367; 28 Am. & Eng. Enc. L. 166. Plaintiff took in place of $ 3,000 cash Booker's promise to pay the debts of Bray owing to the Security Trust Company and the Grand Forks National Bank. A vendor's lien cannot be sustained as security for this substituted obligation. 2 Jones on Liens, § 1074; 3 Pom. Eq. Jr. 1252; McKillip v. McKillip, 8 Barb. 552; 2 Devlin on Deeds, § 1256; 1 Lead. Cas. in Eq. 355; Paterson v. Edwards, 29 Miss. 71; Chapman v. Beardsley, 31 Conn. 115. When as part of the transaction Booker agreed to pay the notes held by these corporations against Bray, he became liable therefor under the rule that a third person may sue upon such a promise as being made for his benefit. Wager v. Link, 150 N.Y. 549; Alvord v. Spring Valley, 40 P. 27; Williams v. Zaftzer, 37 P. 411; Keller v. Ashford, 133 U.S. 622; Moore v. Booker, 4 N.D. 543; Dean v. Walker, 107 Ill. 540; Pugh v. Barnes, 19 So. Rep. 370; Redelsheimer v. Miller, 107 Ind. 485. In California under a statute similar to § 3840, Rev. Codes, it is held that the assumption by a person of a debt owing to a third party renders the promisor liable to such third party for the debt. Williams v. Zaftzer, 37 P. 411; Alvord v. Spring Valley, 40 P. 27. A lien cannot be established as security for damages resulting from a breach of a covenant made by the vendee. Whitely v. Central Trust Co., 76 F. 74; Peters v. Tunell, 43 Minn. 473; Harris v. Haine, 37 Ark. 348; Arlin v. Brown, 44 N.H. 102; Chapman v. Beardsley, 31 Conn. 115; Patterson v. Edwards, 29 Miss. 71. And where the vendor accepts as part of the purchase price the promise of the vendee to pay to third persons debts owing them by the vendor, no lien exists. Patterson v. Edwards, 29 Miss. 71; Chapman v. Beardsley, 31 Conn. 115; Harvey v. Kelly, 93 Am. Dec. 267; 28 Am. & Eng. Enc. L. 165. Any conduct which evinces a purpose not to look to the land for payment is sufficient evidence of waiver. Orrick v. Durham, 79 Mo. 174; 2 Jones on Liens, § 1073; 2 Warville on Vendors, 713; Moshier v. Meek, 80 Ill. 79. Taking collateral for a portion of the purchase price is fatal to a claim of a vendor's lien, not only for the portion secured but also for the remainder. 1 Lead. Cas. in Eq. 356; 2 Jones on Liens, § 1087; Bond v. Kent, 2 Vern. 281; Orrick v. Durham, 79 Mo. 174; Briscoe v. Callaghan, 77 Mo. 134; Calaiborne v. Castle, 32 P. 807. Mrs. Booker was a bona fide purchaser and took the land free of any lien. Wert v. Naylor, 93 Ind. 431; Adams v. Vanderbeck, 47 N.E. 24; Butterfield v. Pitcher, 36 N.J.Eq. 482; Bunn v. Schnellbacher, 45 N.E. 227; Adams v. Vanderbeck, 45 N.E. 645; State Bank v. Frame, 20 S.W. 620; Heath v. Selverthorn, 39 Wis. 146; Mayer v. Heidebach, 123 N.Y. 332. The real party in interest is the Merchants' National Bank and not Mr. Bray in whose name the...